You are here

"Nuclear Plants Vexed at Prices That Shift as Demand Does"

"WASHINGTON -- As costs and competition from cheap natural gas force more old nuclear plants to shut down, their owners have a new complaint: the electricity market is rigged against them."

"Today energy in most of the United States is priced hourly in a deregulated market far different from the one of regulated power plant construction that ushered in the nation’s reactors in the 1960s and 1970s. Generators — whether coal-fired plants, wind farms or reactors — are paid varying amounts over the course of the day, but in periods of light demand and high winds the price goes below zero, so generators have to pay to put kilowatt-hours on the grid and hope to make up for the loss at other times. Only wind generators, which earn a subsidy per kilowatt-hour generated, make money in that situation.

For nuclear plants, which cannot vary their production hour by hour, the pricing mechanism is a substantial blow, as is the low value placed on reactors’ ability to produce electricity when needed, as opposed to wind and sun, which produce electricity when nature cooperates. The executives who operate the energy markets say they are not playing favorites among competing forms of production. The markets are designed 'to be open to all fuels and all technologies,' said Robert G. Ethier, vice president of market development at ISO-New England, the independent system operator that manages the grid in the six New England states. 'We don’t take a position on what’s a good fuel and bad fuel.'"